Kootenay Gold Inc. - Live Customized Report

KOOTENAY GOLD INC. : http://www.kootenaygold.ca/ : Live Customized Report

Promontorio (Sonora, Mexico)

PROMONTORIO SILVER PROJECT, Sonora, Mexico

SETTING THE STAGE FOR ADVANCED EXPLORATION AND DEVELOPMENT

ACQUISITION OF RICH PROMONTORIO SILVER PROJECT
For Kootenay, the milestone acquisition of the Promontorio Silver project represents the culmination of over 2 years of intense negotiating with former property holders and the Mexican Ministry of Mines. Cash and equity commitments exceeding $2million secured the right to a 100% registered and beneficial interest in the highly sought after Promontorio project, which consists of contiguous claims covering a total area of approximately 79,000 hectares.

RESOURCE CALCULATION - released August 18th,2010
The estimate comprises Indicated Mineral Resources of 5.22 million tonnes averaging 52.7 g/t silver, 0.86% lead and 0.96% zinc, containing 8.9 million oz Silver, 99.3 million pounds of lead and 110.8 million pounds of zinc. AGP also estimated that Promontorio contains 0.65 million tonnes averaging 55.7 g/t silver, 0.94% lead and 1.00% zinc in the Inferred category, containing 1.17 million oz Silver, 13.4 million pounds of lead and 14.3 million pounds of zinc.
The initial resource calculation for Promontorio's Pit Discovery Zone was prepared by AGP Mining Consultants (AGP). This independent study has provided us with a quantification of the Pit Zone and helped identify areas where the zone can be expanded through the next phase of drilling.
A Multi-Phase drill program is now planned to expand the Pit Zone resource and test a 700 meter mineralized corridor trending to the North East.

DRILLING ENCOUNTERS WIDESPREAD MINERALIZATION
Kootenay has completed several exploration programs, consisting of; an airborne geophysical survey, ground geophysics, geological mapping, till sampling, prospecting along cut grid lines, 3D IP Survey and more than 25,000 meters of detailed drilling.
Drilling encounted wide to moderate intervals of high-grade silver-gold polymetallic breccias in a porphyry breccia setting. Results received to date report 91 holes, 20 of which intersected significant precious and base metal mineralization starting from surface and extending to depth. Highlights included 18.4 meters grading 950 g/t and 151 meters grading 162 g/t silver-equivalent. Dimensions of the Discovery Zone tested to date are approximately 200 meters by 300 meters in plan by 440 meters vertically. Mineralization remains open to the West, North, East and to depth.

NEXT PHASE OF DRILLING
Follow-up program plans will reflect results from both the resource calculation and the assessment of look-alike anomalous zones. The possibilities include: another phase of drilling to increase the resource size; a phase of drilling testing look-alike targets for new mineralized zones, find a partner to advance to feasibility or some combination. We stress until the current work is done and we are not committed to any specific option and some new ones could arise.

SURFACE SAMPLING RESULTS
The most recent phase of exploration investigated 10 anomalies/ target areas. Kootenay released Gold/Silver assays results from just three of the 30+ High-Priority EM Targets undergoing exploration at Promontorio on July 21,2010.
Highlights include:
Vineteria Zone
• Gold 8.06 g/t; 3.40 g/t; 2.27 g/t; 2.08 g/t
• Copper 10.95%; 12.8%; 3.5%
Gringo Zone
• Gold 8.80 g/t; 3.2 g/t; 3.0 g/t; 2.53 g/t
• Copper 11.2%; 3.4%; 1.1%
Rico Zone
• Silver 895 g/t
• Copper 8.0%

3D IP GEOPHYSICAL SURVEY
The mineralized zone tested to date covers approximately 10% of the 3D IP Geophysical target which comprises a large "L" shaped area of chargeability, with one "arm" measuring 1.6 km and the other 900 meters, and with widths ranging from 250 to 600 meters.
Continuous high IP chargeability between the mineralized Pit Zone and the Northeast Zone underlines the projects large-scale potential. Moreover, multiple untested priority drill targets suggest strong potential for a host of new discoveries within the property.

Click for a larger view

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MULTI-PHASE EXPLORATION ACCELERATES
Work at Promontorio is focused on the evaluation (by mapping and sampling) of more than 24 airborne geophysical anomalies having "look alike" electromagnetic responses to the Pit and Northeast zones; and the next phase of drilling to begin autumn 2010.

To view 3D DRILL MODEL click here

CHRONOLOGY OF A HISTORIC PRODUCER
The first work on the Promontorio property began in the early 1900s by the Manhattan Exploration Co., with funding provided by J.P. Morgan interests. An inclined shaft reaching a depth of 158.5 meters was collared in the hanging wall of the northeast-striking fault on a topographically prominent mineralized outcrop. Two other exploration shafts located to the north were sunk to depths of 30 meters each and a production shaft was sunk to a depth of 25 meters when work was suspended in the 1920s due to the Yaqui rebellion.

In 1958, J.G. White Engineering Corp. recommended the property be put into production. An open cut 85 meters long from 7 by 25 meters wide and 20 meters deep was excavated to expose ore about the 100-level and a small mill was installed at the property.

In 1973, a feasibility study was prepared with an ore reserve estimated at 384,000 metric tons grading 0.12% Cu, 2.80% Pb, 1.74%, Zn, 367 g/t Ag and 1.5 g/t Au, to a depth of 100 m below the floor of the open cut. (This calculation is historic in nature, does not conform to NI 43-101 standards, and cannot be verified, and therefore should not be relied upon.)

In 1988, a small Mexican mining firm completed the mill a 200 ton/day mill and processed approximately 48,000 tons of ore before low metal prices closed the mine in 1990.

In 1997 A Junior Mining Company optioned the property after finding extremely high values of silver, lead, and zinc from chip and channel samples. Limited exploration included eight drill holes, geological mapping, line cutting, and geophysical surveys. However in 1999, with a lull in the exploration and mining industry, the junior allowed its option on the property to lapse.

The Mineral Rich Sierra Madre Trend of Mexico
The Sierra Madre region of Mexico is responsible for discoveries in excess of 520 million oz silver, and 15 million oz of gold. Prior to 2001 the Sierra Madre Trend had no major producers, just six years later it now has six producing mines each containing multi million oz reserves of silver, gold and base metals. In addition, there are two projects under construction and two more in feasibility. Initial drilling by Kootenay at the Promontorio suggests the possibility of a large scale Porphyry system similar to major deposits within this region.

CROSS SECTIONS OF PHASE I & II DRILLING

View the Plan Map Click for Larger View	S3110920N_KP-8,9,10,12,17,20,24,25 Click for Larger View	S3110900N_KP-5,6,7,19,22,23 Click for Larger View
S3110970N_KP-1,2,3,4,18 Click for Larger View	S3110910N_KP-4,6,7,9,10,11,12,17,18,19 Click for Larger View	S628422E_KP-18,19,20,22 Click for Larger View
S628411E_KP-4,7,12,17,18,19,20 Click for Larger View	S628472E_KP-3,4,7,12,116,17,18,19,20 Click for Larger View	View the DH Collar Click for Larger View

Inital Step Out Results January 14, 2010

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This page was created on Tue Sep 7, 2010 at 6:29:30 PM Pacific Time.